TUAS delivers strong half year results
TUAS Limited (ASX:TUA), an emerging player in the Singapore telecom market, has caught the attention of investors and analysts alike. With its subsidiary, Simba, driving robust subscriber growth and a bold expansion into broadband and innovative eSIM products, TUAS is positioning itself as a formidable contender in a highly competitive landscape. A 31 March, 2025 report from broker, Peloton Capital, paints an optimistic picture, valuing the stock at A$8.04 and offering significant upside potential.
Let’s see if this ASX-listed telecom stock deserves further investigation.
Highlights
Strong financial performance in 1H25: TUAS, which has an A$2.5 billion market capitalisation, delivered a standout performance in the first half of 2025 (1H25), with revenues hitting S$73.2 million – a 34 per cent jump from the prior year. Gross margins reached a record 70.2 per cent, and EBITDA soared to S$33.1 million, boasting an impressive 45.2 per cent margin. This profitability milestone (net profit after tax of S$3.0 million compared to a S$3.5 million loss in the first half of 2024 (1H24)) underscores TUAS’s ability to scale efficiently while maintaining cost discipline. As the lowest-cost provider in Singapore, TUAS mirrors the success of Aussie telecom giant TPG, offering value-driven plans that resonate with customers.
Subscriber growth and market share ambitions: TUAS’s mobile network subscribers continue to grow at a rapid rate, with 1.16 million subscribers as of 31 January, 2025, up 10 per cent from 1.05 million in July 2024. Analysts predict this will climb to over 1.2 million by 31 July, 2025, targeting a 20 per cent share of Singapore’s mobile market. Beyond traditional subscribers, TUAS is tapping into new growth levers – like eSIMs for multiple devices, the Johor-Singapore Special Economic Zone, and data-only plans for Internet of Things (IoT) applications (e.g., remote cameras, EVs, and vending machines). A diversified subscriber base and innovative product mix signal long-term growth potential.
10Gbps broadband rollout: TUAS isn’t just a mobile player – it’s expanding into broadband too. With 14,347 fibre broadband subscribers as of January 2025 and a fully upgraded 10Gbps product targeting 1.6 million residential premises, TUAS is capitalising on Singapore’s class-leading fibre infrastructure. Broadband revenue hit S$1.5 million in 1H25, with an annualised run rate of S$5.2 million. Backed by a S$100 million government grant (slated for disbursement in 2025), TUAS offers best-value pricing and short 12-month contracts, positioning it to take market share from incumbents including Singtel and StarHub.
Defensive stock with S&P/ASX 200 potential: In a volatile 2025 market – where the ASX 200 has faced tariff shocks and corrections – TUAS stands out as something of a defensive play. Its recent share price pullback (currently around A$5.32) is seen as a buying opportunity by Peleton, who have published a price target of A$8.04, 50 per cent upside. If TUAS joins the S&P/ASX 200, as Peloton Capital predicts, its valuation could receive a meaningful boost from increased visibility and institutional interest.
Healthy cash position and disciplined capex: With S$73.1 million in cash and a 125 per cent cash conversion rate in 1H25, TUAS is financially sound. Capex for FY25 is guided at S$50-55 million, with S$23 million already spent in 1H25 to bolster 5G infrastructure. This investment ensures TUAS can support subscriber growth without compromising its balance sheet – a rare feat in an otherwise capital-intensive telecom sector.
Upside from innovation and consolidation: TUAS’s Goose eSIM and data-only products add “option value” to its portfolio, while the Singapore telecom market’s consolidation trend could see TUAS emerge as an acquirer. With 13 Mobile Virtual Network Operators (MVNOs) in play and StarHub eyeing M1 and MyRepublic, TUAS’s strong cash reserves and competitive pricing make it a dark horse in potential M&A activity.
The positives include:
Proven growth trajectory: Consistent revenue and subscriber gains, with a clear path to profitability, make TUAS a rare growth stock in telecoms.
Low-cost leadership: By undercutting competitors, TUAS appeals to price-sensitive customers, ensuring steady market share gains.
Diversified revenue streams: Mobile, broadband, and eSIMs reduce reliance on a single segment, enhancing resilience and offering optionality.
Government support: The S$100 million grant for 10Gbps adoption is a game-changer, potentially lowering infrastructure costs and boosting margins.
Defensive qualities: Telecoms are less exposed to economic cycles, offering stability amid Trump-driven macro volatility and uncertainty.
The risks include:
Competitive pressure: Singapore’s telecom market is saturated, with heavyweights like Singtel, StarHub, and M1 (backed by Keppel) fiercely defending their turf. MVNO consolidation could intensify pricing wars.
Capex intensity: While cash reserves are strong, the S$50-55 million FY25 capex guidance signals ongoing capital demands from free cash flow and pressure if subscriber growth falters.
Valuation uncertainty: Peloton’s A$8.04 target assumes solid execution in broadband and mobile expansion – any hiccups could dent investor confidence. We note David Teoh (former CEO of TPG Telecom) and his team have done this before at TPG before they sold it to Vodafone in Australia.
Market volatility: The ASX’s recent turbulence could overshadow TUAS’s fundamentals, especially if global trade tensions persist or geopolitical conflicts escalate.
Acquisition risks: If TUAS pursues M&A via a rights issue, dilution could pressure the share price in the short term.
TUAS isn’t just riding Singapore and Malaysia’s telecom wave – it’s shaping it. Its 1H25 results showcase record margins and a subscriber base that’s growing despite fierce competition. The 10Gbps broadband rollout taps into Singapore’s cutting-edge infrastructure, while eSIM and data-only innovations position TUAS for the future of connectivity. Analysts see it as a defensive gem with upside, especially if it cracks the S&P/ASX 200.
There’s also a groundswell of investor and trader interest. Chat sites in March highlighted TUAS’s maiden profit and 34 per cent revenue surge, while fund manager WAM Capital increased its stake, citing confidence in TUAS’s broadband and eSIM expansion. Even amid a shaky ASX (down 15.8 per cent from its February peak), TUAS’s telecom exposure offers a buffer against cyclical downturns.
TUAS is a telecom stock with a seasoned management and leadership team, operating momentum, defensive characteristics and growth potential.
*$1 SGD as of 16 April 2025 equals $1.20 AUD.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
